Private equity accounting and reporting system and method

ABSTRACT

A private equity accounting and reporting system and method are provided herein.

CROSS REFERENCE TO RELATED APPLICATIONS

This application is a continuation of U.S. application Ser. No. 12/330,414 (U.S. Pat. No. 8,117,096), filed Dec. 8, 2008, titled “PRIVATE EQUITY ACCOUNTING AND REPORTING SYSTEM AND METHOD,” naming inventor Jayne Thompson, and filed under Attorney Docket No. VCVI-2008003. The above-cited application is incorporated herein by reference in its entirety, for all purposes.

FIELD

The present disclosure relates to accounting and reporting specialized data for private equity funds, and more particularly for a method of configuring a general ledger to facilitate industry-specific reporting.

COPYRIGHT NOTICE

A portion of the disclosure of this patent document may contain material that is subject to copyright protection. The copyright owner has no objection to the facsimile reproduction by anyone of the patent document or patent disclosure as it appears in the U.S. Patent and Trademark Office patent file or records, but otherwise reserves all copyright rights whatsoever.

BACKGROUND

Private equity (“PE”) firms typically raise capital in a series of limited-life, closed-end funds. Each fund may typically be a group of separate legal investment entities, each of which is often structured as a limited partnership and formed to address the specific tax structuring needs of significant investor groups (such as tax exempt and foreign investors), to provide special economic arrangements to distinct investor classes, or to segregate investors by the Investment Company Act of 1940 definitions (i.e., Qualified Purchasers vs. Accredited Investors). During fundraising, investor entities (who are often limited partners) typically enter into a subscription agreement committing them to contribute a certain amount over the life of the investment entity in exchange for an agreed-upon share of the investment proceeds realized by the investment entity. As investments are made, the PE firm (who often serves as the general partner or “GP” of the investment entity) typically calls capital from the investor entities, who often participate in each of the investment entity's investments prorata based on relative subscriptions. In a typical fund, investments may be made in 20 to 50 investment targets (which may be operating companies or other investment pools). As investments are realized, proceeds are typically distributed in accordance with the terms of the partnership agreement. The PE firm may be compensated for its services through both a periodic management fee and a share of the investment entity's profits, known as the “carried interest.”

Real estate investment partnerships are considered “PE” firms as the term is used herein.

The nature and structure of PE funds typically requires specialized managerial or internal reporting relative to other enterprises, including the following.

Fund-to-date reporting: Since private equity is a long-term asset class, PE funds may report information on both a fiscal year and life-to-date (“FTD”) basis.

Specialized metrics reporting: PE firms may be benchmarked by a number of industry specific metrics such as dollar-weighted returns (referred to as “internal rate of return” or “IRR”), distributions to paid-in ratios, and value to paid-in ratios. IRR is often measured over various dimensions, such as sector, region, initial stage of investment, and investment partner (e.g., the PE firm's employee who is responsible for the investment).

Multi-level reporting: Since a PE fund is comprised of parallel legal entities, results may be reported at both the investment entity and the fund level. Furthermore, since the PE firm may raise capital over a series of funds, existing and potential investor entities may demand firm-level results (i.e., an aggregation of fund level results) when analyzing PE firm performance. The challenge of multi-level reporting depends on the number of entities in each fund and the number of funds raised over time by the PE firm.

Capital account reporting: Unlike an incorporated entity that simply issues entity-level financial reports to its investors, PE funds may issue “capital account” reports to individual investor entities. These reports are typically issued quarterly, and may include the individual partner's capital contributions, distributions, and share of operating activity, including realized and unrealized investment gains and losses. This may require detailed allocations of the investment partnership's operating activity to individual partners based on complex provisions of the limited partnership agreement known as the “waterfall.” Since each limited partnership agreement may be negotiated based on prevailing market terms at the time of fundraising and the desired economic terms with each investor class, each of the PE firm's investment entities may have different waterfall allocations. Likewise, classes of investor entities in a single investment entity may have different waterfall allocations.

Ad hoc reporting: A single PE fund may have 300 or more investor entities, including private and governmental pension plans, insurance companies, family trusts, and high net worth individuals. These investor entities may employ portfolio managers who allocate the investor entity's investments across various asset classes and to individual investment firms within each asset class. As these portfolio managers perform their individual analysis, they may make a number of ad hoc information requests to the PE firm. Accordingly, the PE firm may be asked to report the same information in various formats as prescribed by each investor entity.

“Family” or “Cross-fund” capital account reporting: An investor may have multiple legal investor entities through which it invests in the investment partnership. For example, a wealthy family may have a separate trust for each child. Each trust may be treated as a separate investor entity and may receive its own capital account report from the investment partnership. Such investors frequently ask for a “family” level report (i.e., an aggregation of the individual capital accounts) for monitoring purposes. Similarly, a single investor entity frequently commits to a number of the PE firm's funds over time and may request a consolidated capital account report that aggregates its capital account activity across several of the PE firm's investment partnerships.

Period specific reporting: Although many investment entities operate on a December 31 fiscal year, investor entities may operate on either a June 30 or September 30 fiscal year. Investor entities may therefore request capital account information for their fiscal year rather than the investment partnership's fiscal year. Accordingly, the PE firm may wish to report information for user-defined periods, which may cross the fiscal year of the investment partnership.

Tax reporting: Limited partnerships are typically tax transparent entities—i.e., the partnership is not responsible for paying tax on its taxable income. Instead, the partnership may file an informational return (Form 1065) and may issue a Schedule K−1 to each partner (i.e., investor entity) that details the partner's share of taxable activity to be reported on the partner's tax return. The PE firm may therefore maintain tax as well as financial capital accounts that adhere to Generally Accepted Accounting Principles (“GAAP”) by individual investor entity. Tax and GAAP capital accounts may differ because of book and tax differences, which are reported on Schedule M−1 of the Form 1065 (“M−1 differences”).

Using the common approach, a PE firm bookkeeper may need to consult only one general ledger account for the balance of an investment or one general ledger account for the capital account balance of an investor entity. However, using the common approach, it may be relatively difficult to produce many of the specialized reports described above. Accordingly, it is common for PE firms to keep at least one parallel set of books—one in general ledger software, and one in a set of spreadsheets. In such firms, the general ledger software is typically used for financial and regulatory reporting, while the spreadsheets are typically used for managerial and/or internal reporting.

BRIEF DESCRIPTION OF THE DRAWINGS

FIG. 1 is a diagram illustrating an exemplary PE accounting/reporting device in accordance with one embodiment.

FIG. 2 is a diagram conceptually illustrating a series of exemplary equity investment transactions in accordance with one embodiment.

FIG. 3 is a key identifying several unique accounts for transactions illustrated in FIG. 2, in accordance with one embodiment.

FIG. 4 is a diagram illustrating a combination of segment identifiers that define a unique gain/loss account in accordance with one embodiment.

FIG. 5 is a diagram illustrating a combination of segment identifiers that define a unique investor entity (i.e., partner) capital account in accordance with one embodiment.

FIG. 6 is a diagram illustrating a generic segment identifier in accordance with one embodiment.

FIG. 7 is a flow diagram illustrating an account creation and entry recording routine in accordance with one embodiment.

FIG. 8 is a flow diagram illustrating an account identification routine in accordance with one embodiment.

FIG. 9 is a flow diagram illustrating a reporting routine in accordance with one embodiment.

FIG. 10 is an exemplary Partner Capital Account Summary report in accordance with one embodiment.

FIG. 11 is an exemplary Portfolio Summary report in accordance with one embodiment.

FIG. 12 is an exemplary Returns Analysis report in accordance with one embodiment.

FIG. 13 is an exemplary Gross IRR Analysis report in accordance with one embodiment.

FIG. 14 is an exemplary Transaction Detail report in accordance with one embodiment.

FIG. 15 is an exemplary Schedule of Portfolio Investments report in accordance with one embodiment.

FIG. 16 is an exemplary Portfolio Investments for Specified Period report in accordance with one embodiment.

FIG. 17 is an exemplary Realizations Report for Specified Period in accordance with one embodiment.

FIG. 18 is an exemplary Statement of Assets, Liabilities, and Partners' Capital report in accordance with one embodiment.

FIG. 19 is an exemplary Statement of Operations report in accordance with one embodiment.

FIG. 20 is an exemplary Statement of Cash Flows report in accordance with one embodiment.

FIG. 21 is an exemplary Partners Capital Account Activity report in accordance with one embodiment.

FIG. 22 is an exemplary Condensed Schedule of Portfolio Investments report in accordance with one embodiment.

FIG. 23 is an exemplary Treasury Status report in accordance with one embodiment.

FIG. 24 is an exemplary Deal Summary report, in accordance with one embodiment.

FIG. 25 is an exemplary Funding Detail report in accordance with one embodiment.

FIG. 26 is an exemplary Statement of Changes in Partners' Capital report in accordance with one embodiment.

FIG. 27 is an exemplary Statement of Operations Detail report in accordance with one embodiment.

FIG. 28 is an exemplary “Dashboard” report in accordance with one embodiment.

DESCRIPTION

Reference is now made in detail to the description of the embodiments as illustrated in the drawings. While embodiments are described in connection with the drawings and related descriptions, there is no intent to limit the scope to the embodiments disclosed herein. On the contrary, the intent is to cover all alternatives, modifications and equivalents. In alternate embodiments, additional devices, or combinations of illustrated devices, may be added to, or combined, without limiting the scope to the embodiments disclosed herein.

FIG. 1 illustrates several components of an exemplary PE accounting/reporting device 100. In other embodiments, a PE accounting/reporting device 100 may include many more components than those shown in FIG. 1. However, it is not necessary that all of these generally conventional components be shown in order to disclose an enabling embodiment. As shown in FIG. 1, the PE accounting/reporting device 100 includes an optional network interface 130 for connecting to remote devices. If present, the network interface 130 may be a network interface designed to support a local area network (LAN), wireless local area network (WLAN), personal area network (PAN), telephone network, powerline connection, serial bus, universal serial bus (USB) wireless connection, or the like. The optional network interface 130 includes the necessary circuitry, driver and/or transceiver for such a connection and is constructed for use with the appropriate protocols for such a connection.

The PE accounting/reporting device 100 also includes a processing unit 110, an optional display 140, and a memory 150, all interconnected along with the optional network interface 130 via a bus 120. Those of ordinary skill in the art and others will appreciate that the display 140 may not be necessary in all forms of computing devices and, accordingly, is an optional component. The memory 150 generally comprises random access memory (“RAM”), a read only memory (“ROM”), and a permanent mass storage device, such as a disk drive, flash RAM, or the like. The memory 150 stores the program code and/or data storage necessary for implementing a general ledger accounting system 160, a list of segment identifiers 165, account creation and entry recording routines 700, reporting routines 900, account identification routines 800, and a supplemental information data source 185. Additionally, the memory 150 stores an operating system 155.

These and similar software components may be loaded from a computer readable medium into memory 150 of the PE accounting/reporting device 100 using a drive mechanism (not shown) or network mechanism (not shown) associated with the computer readable medium, such as a floppy, tape, DVD/CD-ROM drive, flash RAM, or network interface card.

Although a conventional general-purpose computing device may be transformed via software into a PE accounting/reporting device 100 as described, a PE accounting/reporting device 100 may also be embodied on a great number of devices capable of recording and reporting accounting entries. For example, in alternate embodiments, a PE accounting/reporting device 100 may be embodied on a mobile phone, personal digital assistant, personal computer, or the like.

FIG. 2 is a diagram conceptually illustrating a series of exemplary equity transactions in accordance with one embodiment. One or more investment entities 210, 215 participate in a PE fund 205. In the illustrated scenario, investment entity A 210 provides an asset that the PE fund 205 used to fund an investment transaction 225A in a particular target (target A) 230 in exchange for which, the PE fund 205 obtains a number of shares of a particular equity security 235 issued by target A 230 in transaction 225B. Similarly, investment entity N 215 provides an asset 245 that is used to fund an investment transaction 225C in target A 230 and an investment transaction 225D in target B 265. In exchange, the PE fund 205 obtains equity securities 255 and debt securities 270 in transactions 225E and 225F, respectively.

Over the life of an investment, such as those illustrated in FIG. 2, there may be a number of additional transactions related to the initial investment. For example, a bridge loan may be converted to a preferred equity security. The preferred equity security may subsequently be converted to common stock of the issuer. Upon exit, the common stock may be exchanged for securities of the acquiror. A PE firm may wish to have a complete history of these transactions for monitoring and analyzing its portfolio. In addition, various transaction types may be processed differently for purposes of various financial and management reports. Accordingly, in one embodiment, each transaction type for a particular investment entity, target, and security may be recorded in a unique account.

FIG. 3 identifies several unique accounts that may be created and used to record transactions 225A-F. Transaction 225A-F are each members of a unique class of transactions that may be characterized as the intersection of several transaction “dimensions.” In an exemplary embodiment, there are four “dimensions” representing various transaction parameter classes, including the identity of the investment entity 305, the identity of the investment target 315, the type of security or asset received 320, and the type of transaction within an asset type 310. Thus, as illustrated in FIG. 3, transactions 225A-F may be characterized as six unique intersection points among dimensions 305-320. Put another way, each of transactions 225A-F may be characterized as a unique combination of several (in this case, four) transaction parameter classes 305-320. As discussed below, these and other combinations, similarly derived, may be used to create and identify a multiplicity of general ledger accounts, each used to record accounting entries associated with a particular combination of transaction parameters.

Accordingly, various embodiments, described in more detail below, may enable a PE firm to use the same general ledger accounts that are used for financial reporting to generate some or all of the above-described industry-specific managerial reports, including investment tracking (both invested dollars and units); portfolio statistics and metrics (including gross and net IRR calculations, as applicable) for the firm, fund, entity, or any pre-determined dimension such as sector or geography; individual or family capital account reporting (including capital call calculations and income/loss allocations) by entity or across funds; M−1 difference and tax capital account reporting; and management company reporting. Data rich reports may be generated for pre-determined periods (i.e., quarterly, fiscal year, or FTD) or flexible reporting periods crossing fiscal years.

Some general ledger accounting software may benefit from certain functionality in various report writer solutions, including SAP's XL Reporter (“XLR”), as distributed domestically by Solver, Inc. of Los Angeles, Calif. Such report writers may enable definition of various reports that may be able to draw specifically defined accounting entries from a particularly configured general ledger. Reports may be further presented and manipulated in appropriate software packages, e.g., a spreadsheet software package.

In other embodiments, more or fewer parameter classes may be present. In particular, in other embodiments, further transaction parameter classes may include the sector of the target, the identity of a PE firm employee or associate responsible for the transaction, an investment duration or “active thru” parameter, a publicly-held/privately-held parameter, and an identity of a PE firm partner who is responsible for the transaction. In various embodiments, such additional parameters may be implemented as user-defined fields associated with each general ledger account.

As illustrated in FIG. 4, the following four parameter classes may be used to create and identify gain/loss accounts in a general ledger: transaction type 405, investment entity 410, investment target 415, and security type 420.

As illustrated in FIG. 5, the following four parameter classes may be used to create and identify investor capital accounts in a general ledger: transaction type 405, investment entity 410, partner 515, and an optional partner transaction type 520.

In an exemplary embodiment, a transaction parameter class may have a list of unique identifiers to represent each member of the class. FIG. 6 illustrates an exemplary structure of a generic transaction parameter identifier 600, which includes a species identifier 605, an optional sub-species identifier 610, and a member identifier 615. In one embodiment, an identifier may comprise four or fewer alphanumeric characters. In some cases, an identifier may also lack a species identifier 605, in which case, an identifier would include only a member identifier 615.

Various transaction type classes may include species, sub-species, and members as listed in Tables 1-5, below. Since requirements of each installation may be different, the configuration details that follow are but one embodiment. They are representative of a typical installation, but users will modify the configuration to meet their specific needs.

In one embodiment, transaction type species may comprise the following:

-   -   Assets, see Table 1;     -   Liabilities, see Table 2;     -   Partners' Capital, see Table 3;     -   Income, Including Portfolio Gains and Losses, see Table 4; and     -   Expenses, see Table 5.

The list of transaction types and identifiers in Tables 1-5 is not exhaustive but is representative of the level of detail required for capturing the portfolio activity. Along with lists of representative transaction types, Tables 1-5 also list a set of exemplary four-digit transaction type identifiers, in accordance with one embodiment. In the exemplary embodiment, the first digit of the transaction type identifiers acts as a species identifier 605, the second digit as a sub-species identifier 610 (where appropriate), and the third and fourth digits as a member identifier 615.

TABLE 1 Member definitions for Asset Species (1XXX) ID Description Definition 1000 Cash 1100 Capital calls receivable 12XX Debt Investments Sub-species 1210 Invested - Debt Cash fundings only 1211 Invested - Debt CR Special cash adjustments to portfolio adjustments company debt fundings. Used principally for final closing true-ups for reduction of investment. 1212 Invested - Debt DR Special cash adjustments to portfolio adjustments company debt fundings. Used principally for final closing true-ups for increase in investment. 1219 OID on funded debt Contra to Main Segment 1210 to reflect OID on funded debt. Use 1242 for OID on exchange debt. 1220 Capitalized interest - Debt Stated interest capitalized as debt principal 1221 Periodic accreting interest Periodic accretion of interest 1229 OID amortization Accumulated amortization of OID (debit bal) - Use for OID amortization on funded debt only. See 1243 for OID amortization on exchange debt. 1231 Original Issue Discount OID on funded (i.e., 121X) debt - Contra account 1232 OID Amortization OID amortization on funded debt 1241 Debt received for equity Debt received for equity of same issuer. This is the offset to 1341. 1242 OID on exchange debt Contra to Main Segment 1241 for OID on exchange (i.e., non-funded) debt 1243 OID amortization on Accumulated amortization of exchange debt OID (debit bal) - Use for OID amortization on exchange debt only. 1251 Bridge converted to debt Bridge loan converted to another form of debt 1255 Other debt exchanges Exchange of debt for debt 1260 Bridge converted to equity Bridge (P&I) converted to equity 1261 Conv debt converted to Other debt (P&I) converted to equity equity 1268 Contributed debt In-kind contribution of debt (See 1328) 1271 Debt security repayment Cash pmt from issuer EXCLUDING Bridge loans 1272 Debt transfer Cash from sale/transfer of debt to 3rd party 1276 Bridge repayment Bridge loan repayment 1280 Unrecovered debt Debt written off 1290 Unrealized adjustments on Unrealized adjustments on debt debt securities 13XX Portfolio equity investments sub-species 1310 Invested - Equity Cash fundings only 1311 Invested - CR Adjustments Special cash adjustments to portfolio company equity fundings. Used principally for final closing true- ups for reduction of investment. 1312 Invested - DR Adjustments Special cash adjustments to portfolio company equity fundings. Used principally for final closing true-ups for increase in investment. 1318 Invested - Other outside Cash fundings for outside basis basis other than blocker expenses. These amounts are excluded from Portfolio Company funded reports 1319 Invested - Blocker Cash fundings for blocker expenses expenses. These amounts are excluded from Portfolio Company funded reports 1320 Equity from bridge Bridge loan conversions - conversions Principal portion 1325 Converted from debt Bridge loan conversions - interest Capitalized interest 1328 In-kind contribution of debt Equity for debt of 3rd party (See 1268) 1331 Capitalized dividends Capitalized dividends 1341 Equity received for debt Equity received in exchange for debt of issuer 1346 Equity rec'd for debt due to Equity received for debt in merger merg 1351 Exchange of preferred - OI Exchange preferred stock for another class of issuer's preferred stock 1352 Ex preferred for common - Exchange preferred stock for OI issuer's common stock 1353 Ex common for preferred - Exchange common stock for OI issuer's preferred stock 1354 Ex common for common - Exchange common stock for another OI class of issuer's common stock 1355 Exchange of preferred - Exchange preferred stock for Merger acquirer's preferred stock 1356 Ex preferred for common - Exchange preferred stock for Merger acquirer's common stock 1357 Ex common for preferred - Exchange common stock for Merger acquirer's preferred stock 1358 Ex common for common - Exchange common stock for Merger another class of acquirer's common stock 1359 Other equity exchanges Equity exchanges not elsewhere classified 1361 Spin-out Spin-out transactions 1362 Exercise stock rights Includes exercise of option, warrant, etc. 1363 Convert convertible Conversion of convertible securities securities 1365 New securities - Basis Reallocate basis due to new reallocation securities issuance 1369 Internal entity restructuring Transaction required for internal structuring only 1371 Equity returned Cash from port co—i.e., share buybacks 1372 Sale of equity Cash from sale/transfer to 3rd party 1380 Unrecovered equity Equity basis written off 1390 Unrealized Adj - Equity Unrealized adjustments on equity securities 14XX Feeder/GP Entity investments Sub-species 1410 Contributions Contributions to downstream Feeder Entity-Outside partnership 1419 Basis Outside basis in feeder entity 1420 Net investment income/loss Allocations from downstream partnership 1430 Net realized gain/loss Allocations from downstream partnership 1450 Unrealized adjustments Allocations from downstream partnership 1480 Distributions Distributions from downstream partnership 1490 Syndication costs Syndication costs allocated by downstream ptr 15XX Unit Accounts for Ancillary Portfolio Data Sub-species 1510 Shares Expected UNIT AC—Contractual shares (by series) 1511 Warrants Expected UNIT AC—Contractual warrants (by series) 1520 Shares - Received UNIT AC—Shares inventory (by series) 1521 Warrants - Received UNIT AC—Warrants inventory (by series) 1540 CSE Conversion Rate UNIT AC—CSE conversion rate by series 1580 Invest Contribution Called UNIT AC—Investment contributions called 1599 Investment Commitments UNIT AC—Commitments (by series) and reserves 16XX Other Asset Accounts Sub-species 1610 Prepaid Insurance Prepaid insurance 1620 Prepaid Bank Fee Prepaid LOC fees, etc. 1650 Other Prepaids Other prepaids 17XX Other Receivables Sub-species 1710 Accrued Interest Accrued interest receivable Receivable 1720 AR for Securities Sold AR for securities sold 1721 Escrow Receivable Escrowed cash proceeds receivable 1722 Note Receivable for Note receivable re securities sold Securities Sold 1730 Accounts Receivable Due from affiliates 1740 Due from Affiliates Other Receivable

TABLE 2 Member definitions for Liabilities Species (2XXX) ID Description 2000 Accounts payable 2011 Due to affiliates 2015 Accrued liabilities 2020 Capital call payable 23XX Notes payable sub-species 2310 Revolving note - Proceeds 2311 Revolving note - Re-payments 2312 Demand note - Proceeds 2313 Demand note - Re-payments 2700 Other liabilities

As illustrated in Table 3, below, Partners' Capital Species Identifiers may identify accounts used to capture partner capital account data, including subscriptions, contributions, distributions, transfers, and income/loss allocations, as well as remaining and fulfilled subscriptions. Design of the Partners' Capital species accounts and identifiers may be highly dependent on the terms of the PE firm's limited partnership agreements. If, for example, the partnership agreement provides for recycling of investment proceeds, a recallable distributions account may be required Likewise, distributions may be captured in the distributions sub-species (33xx), and the level of detail for capturing distribution information may depend on the PE firm's waterfall provisions.

TABLE 3 Member definitions for Partners' Capital Species (3XXX) ID Description 300X Commitments sub-species 3001 Initial commitment 3002 Remaining commitment 3003 Fulfilled commitment 3004 Recyled distributions 3005 Recallable distributions 3100 Contributions 319X Blocker corporation capital receipts sub-species 3190 Common Stock 3191 Additional Paid in Capital 3199 Contributions Breakdown 33XX Distributions sub-species 3391 Return of capital from blocker 3410 Syndication costs 3500 Transfer of capital balance 38XX Allocations sub-species 3810 Management fees 3811 Net investment income/loss 3830 Realized gains/losses 3850 Unrealized appreciation/depreciation 39XX Beginning retained earnings sub-species 3910 Management fees 3911 Net investment income/loss 3930 Realized gains 3931 Realized losses 3950 Unrealized appreciation/depreciation 3999 Automated closing entry

TABLE 4 Member definitions for Income, Including Portfolio Gains and Losses Species (4XXX) ID Description 41XX Portfolio income sub-species 4110 Interest income - Bank 4112 Interest income - Portfolio 4130 Dividend income 4190 Net investment income (loss) from downstream partnerships 4200 Management fee income 45XX Portfolio Gains & Losses sub-species 4511 Realized losses 4521 CASH Realized gains 4522 NON-CASH Realized gains 4550 Unrealized appreciation/depreciation for current period

TABLE 5 Member definitions for Partnership Expenses Species (7XXX) ID Description 7100 Management fees 72XX Professional fees sub-species 7210 Legal fees 7220 Audit/tax fees 7280 Other professional fees 75XX Interest expense sub-species 7510 Revolving note 7511 Demand note 7550 Other 78XX Other expenses sub-species 7810 Printing 7820 Business license fees 7825 Franchise fees 7830 Insurance 7840 Bank charges 7850 Bank charges - Line of credit 7871 Annual meeting expenses - Meals 7872 Annual meeting expenses - Other 7890 Penalties

Although an expansive exemplary set of transaction type members, species, and identifiers is disclosed in Tables 1-5, in a minimal embodiment, as few as four sub-species of transaction types, each having one or more members, may be identified, including those listed in Table 6. Transaction type identifiers in the Equity Invested, Equity Return, and Portfolio Gains/Losses sub-species (e.g., 13XX and 45XX exemplary identifiers) may be used in a four part portfolio series account parameter combination 400. Transaction type identifiers in the Partners' Capital Allocations sub-species (e.g., exemplary identifier 38XX) may be used in a three or four part partner series account identifier combination 500.

TABLE 6 Minimal set of Transaction Type members and exemplary identifiers ID Description 131X Equity Invested sub-species 1310 Invested - Equity 1318 Invested - Other outside basis 137X Equity Return sub-species 1371 Equity returned 38XX Partners' Capital Allocations sub-species 3811 Net investment income/loss 3830 Realized gains/losses 3850 Unrealized appreciation/depreciation 45XX Portfolio Gains/Losses sub-species 4521 Other Realized gains/losses 4522 Non-Cash Realized gains 4550 Unrealized appreciation/depreciation for current period

In another embodiment, the minimal set of transaction types of Table 6 may be expanded to include some or all of those listed in Table 7, which may be used in a four part portfolio series account parameter combination 400.

TABLE 7 Additions to Minimal set of Transaction Types and exemplary identifiers ID Description 1210 Invested - Debt 1276 Debt repayment 1720 AR for securities sold

In still other embodiments, various other subsets of the transaction type identifiers listed in Tables 1-7 may be used.

Investment Entity Identifiers

In accordance with one embodiment, Investment Entity Identifiers 410 may be constructed using exemplary species (and exemplary species identifiers) listed in Table 8.

TABLE 8 Investment Entity Species and Exemplary Identifiers ID Description A Fund investment partnerships F Feeder entities G General partner entities H General partner of the GP entities I Intermediary entities, i.e., blocker entities S Special purpose entities

In an exemplary embodiment, sub-species identifiers 610 are not used in Investment Entity Identifiers 410, and member identifiers 615 may comprise two alphanumeric characters. In one embodiment, member identifiers 615 assigned based on each entity's legal structure. Thus, in an exemplary embodiment, an investment entity may have a unique identifier such as “A01,” “A02,” “F01,” and the like.

Investment Target Identifiers

In accordance with one embodiment, Investment Target Identifiers 415 may be constructed using exemplary species (and exemplary species identifiers) listed in Table 9.

TABLE 9 Investment Target Species and Exemplary Identifiers ID Description C targets directly invested in I targets indirectly invested in (e.g., targets invested in through an intermediary or blocker corporation) S targets invested in through a special purpose entity

In an exemplary embodiment, sub-species identifiers 610 are not used in Investment Target Identifiers 415, and member identifiers 615 may comprise three alphanumeric characters, unique to each target. In an exemplary embodiment, crossover investments (i.e., investments in a single portfolio company by multiple funds) use the same Investment Target Identifier 415 in both funds. Conversely, in the event of spin-outs, mergers and acquisitions, and other restructuring activities, a new Investment Target Identifier 415 may be assigned to the successor company.

In one embodiment, supplemental information may be used to provide a more descriptive name for some or all investment targets. For example, an investment target having an identifier such as “C001,” may be associated with supplemental information comprising a company name, e.g., A Big Deal, Inc. Such supplemental information may be used, for example, for printing on reports. As with other types of supplemental information, company name supplemental information may be maintained in a spreadsheet file, in an external database, in a text file, on a network accessible data store, or in another electronic data source.

Security Type Identifiers

In one embodiment, Security Type Identifiers 420 may be constructed using exemplary species (and exemplary species identifiers) listed in Table 10.

TABLE 10 Security Type Species and exemplary identifiers ID Species A Notes C Preferred Stock D LLC - Preferred interest G Common Stock H LLC - Common interest J Options - Preferred (Stock or LLC) K Options - Common (Stock or LLC) O Warrants - Preferred Stock P Warrants - Common Stock T Escrow - Preferred Stock U Escrow - Preferred LLC Interest V Escrow - Common Stock W Escrow - Common LLC Interest

In an exemplary embodiment, Sub-Species Identifiers 610 are not used in Security Type Identifiers 420, and member identifiers 615 may comprise three alphanumeric characters. In one embodiment, member identifiers 615 assigned to ensure that securities for a target sort in the proper order on a schedule of investments. Thus, in an exemplary embodiment, a security may have a unique identifier such as “C0A0” (e.g., Series A Preferred Stock); “C0A1” (e.g., Series A-1 Preferred Stock); “C1A0” (e.g., Series 1-A Preferred Stock); and the like. In one embodiment, an identifier such as “RRRR” may be used to denote reserves if a PE firm elects to track reserves.

In one embodiment, supplemental information may be used to provide a more descriptive name for some or all security types of some or all investment targets. For example, an security type having an identifier such as “C0A0,” may be associated with supplemental information comprising a descriptive security name, e.g., “Series A redeemable participating preferred stock.” Such supplemental information may be used, for example, for printing on reports. As with other types of supplemental information, security name supplemental information may be maintained in a spreadsheet file, in an external database, in a text file, on a network accessible data store, in another electronic data source, or the like.

In some embodiments, descriptive security name supplemental information may be cross-indexed by investment target. For example when reporting on security identifier “C0A0” as issued by investment target identifier “C001,” the descriptive security name may be identified as “Series A redeemable participating preferred stock.” However, when reporting on security identifier “C0A0” as issued by investment target identifier “C002,” the descriptive security name may be identified as “8% Series A participating preferred stock.”

Partner Identifiers

In accordance with one embodiment, Partner Identifiers 515 may be constructed using the exemplary species (and exemplary species identifier) in Table 11.

TABLE 11 Partner Species and Exemplary Identifier ID Species PG General Partner investor entities P1-P9 Limited Partner investor entities

In other embodiments, one or more sub-species identifiers 610 may be used to distinguish General Partner entities from limited partner entities. In an exemplary embodiment, member identifiers 615 may comprise two alphanumeric characters.

In one embodiment, the same field may be used for both Investment Target Identifiers 415 and Partner Identifiers 515, in which case, Investment Target Species Identifiers (such as those listed in Table 9) may be chosen to be distinct from Partner Species Identifiers (such as those listed in Table 11).

In one embodiment, supplemental information may be used to provide a more descriptive name (e.g., “ABC Pension Plan”) for some or all partners in a manner similar to that described above for other types of supplemental information.

Partner Transaction Type Identifier

In various embodiments, Partner Transaction Type Identifier 520 may optionally be used to capture information relevant to a particular investment entity's investment (or partnership) agreement. For example, if the limited partnership agreement provides for deemed distributions, Partner Transaction Type Identifier 520 may use species identifiers to distinguish between cash and deemed distributions. Likewise, a species identifier may be used when the investment agreement provides for “cashless” contributions by the GP. An exemplary list of Partner Transaction Type Identifiers 520 is provided in Table 12.

TABLE 12 Exemplary Partner Transaction Identifiers 00CC Cash contribution or distribution 00DD Deemed cash contribution or distribution 00IE Interest equivalent contributions (due to multiple closings) 00OF Contra (offset) to adjust for timing of contributions (due to multiple closings) 00SS Stock distribution 00ZY GP deemed offset contra 00ZZ GP management fee offset 00CI Carried interest (to capture GP's carried interest allocations) TRCC Transfer (to transfer contribution activity) TRIE Transfer (to transfer interest equivalent contribution activity) TRAN Transfer (to transfer other elements of capital account activity) INKD In-kind contributions (to transfer across entities)

Other Transaction Parameter Classes

In various embodiments, additional transaction parameter classes may include some or all of the following:

-   -   Associate Identity: An Associate Identity transaction parameter         class may enable a PE firm to filter certain investment reports         for a subset of the portfolio assigned to a specific associate         (i.e., PE firm employee responsible for the investment).     -   Active Thru Date: An Active Thru Date transaction parameter         class may be used to exclude information on inactive accounts.         An exemplary identifier convention is YYYYMMDD.     -   Status: A Status transaction parameter class may be used to         segregate publicly-traded and privately-held investments.     -   Partner: The Partner transaction parameter class may enable a PE         firm to filter transactions by lead partner.

FIG. 7 is a flow diagram illustrating an account creation and entry recording routine 700 in accordance with one embodiment. At block 705, routine 700 obtains an indication of an investment transaction. In one embodiment, the indicated investment transaction includes transaction parameters including at least an identity of the investment entity 305, an identity of the investment target 315, a type of the security involved in the transaction 320, and a type of the transaction 310. Using the transaction parameters, subroutine 800, illustrated in FIG. 8 and discussed below, identifies a unique account for transactions with the indicated combination of transaction parameters. In decision block 730, routine 700 determines whether the uniquely identified account already exists. If the uniquely identified account does exist (because, e.g., a previous transaction had the same combination of transaction parameters as the indicated transaction), then in block 740, an accounting entry for the indicated investment transaction is recorded in the uniquely identified account.

If in block 730, the uniquely identified account is determined to not exist (because, e.g., the indicated transaction is the first to have the particular combination of transaction parameters), then in block 735, the uniquely identified account is created using the indicated combination of transaction parameters. After the uniquely identified account is created, in block 740, an accounting entry for the indicated investment transaction is recorded in the uniquely identified account. The routine 700 ends at block 799.

FIG. 8 is a flow diagram illustrating an account identification subroutine 800 in accordance with one embodiment. The subroutine 800 begins in block 805, in which a plurality of transaction parameters is obtained, typically from a calling routine. In block 810, an transaction type identifier 405 is selected from a transaction type identifier list. In an exemplary embodiment, the selected transaction type identifier 405 is structured as discussed above in Tables 1-5 and associated text. Similarly, in block 815, an investment entity identifier 410 is selected from an investment entity identifier list. In an exemplary embodiment, the selected investment entity identifier 410 is structured as discussed above in Table 8 and associated text.

In decision block 820, subroutine 800 determines whether the selected transaction type identifier 405 is within the Partners' Capital species, as discussed above in reference to Table 3. If the selected transaction type identifier 405 is within the Partners' Capital species, then the subroutine 800 needs to select identifiers for a Partners' Capital identifier combination 500, as illustrated in FIG. 5. In block 835, a partner identifier 515 is selected from a partner identifier list. In an exemplary embodiment, the selected partner identifier 515 is structured as discussed above in Table 11 and associated text. In block 840, a partner transaction type identifier 520 is optionally selected from a partner transaction type identifier list. In an exemplary embodiment, the selected partner transaction type identifier 520 is structured as discussed above in Table 12 and associated text.

If in decision block 820, the selected transaction type identifier 405 is determined to be outside the Partners' Capital species, then the subroutine 800 needs to select identifiers for a Portfolio Series identifier combination 400, as illustrated in FIG. 4. In block 825, an investment target identifier 415 is selected from an investment target identifier list. In an exemplary embodiment, the selected investment target identifier 415 is structured as discussed above in Table 9 and associated text. In block 830, a security type identifier 420 is selected from a security type identifier list. In an exemplary embodiment, the selected security type identifier 420 is structured as discussed above in Table 10 and associated text.

In decision block 845, subroutine 800 determines whether there are transaction parameters other than those discussed above. If so, subroutine 800 loops from beginning block 855 to ending block 865, selecting other identifiers in block 860 from other identifier lists, as appropriate.

In block 850, the selected identifiers 405-10 and 415-20 or 515-20 (and other identifiers, if other transaction parameters were determined in block 845) are combined into a unique account combination 400 or 500. The subroutine 800 ends in block 899, returning the combined unique account combination 400 or 500.

Typically, the various identifier lists discussed above in reference to FIG. 8 are stored in one or more electronic data sources accessible by the subroutine 800, such as, in various embodiments, a database, spreadsheet, text file, binary file, network server, and the like.

Reporting

In various embodiments, general ledgers may have a great number of accounts, and transactions related to a particular investment may be split up among several accounts. As such, it may be desirable to utilize a reporting tool capable of “rolling-up” accounting entries in various accounts to obtain data related to various reporting metrics.

FIG. 9 is a flow diagram illustrating a reporting routine 900 in accordance with one embodiment. The reporting routine 900 begins in block 905, in which it receives a reporting indication. In an exemplary embodiment, the reporting indication may include one of the reports listed in Appendix A and FIGS. 10-28, although in various embodiments, more or fewer reporting indications may be supported. In an exemplary embodiment, the reporting indication may also include one or more transaction parameters, including a particular investment target, investment entity, security type, partner, and/or partner transaction type.

Various reports utilize accounting entries from one or more accounts, selected according to various predetermined criteria. In step 910, reporting routine 900 determines one or more reporting components necessary to generate the indicated report. As used herein, the term “reporting component” refers to a numerical figure that may be derived from accounting entries in accounts identified by one or more unique combinations of transaction parameters. For example, in step 905, the reporting routine 900 may obtain an indication to generate an Internal Rate of Return (IRR) Report for a particular investment entity and a particular investment target, the indicated IRR Report having the following lines:

-   -   Cash investments (excluding blocker expense fundings), net of         bridge loan proceeds;     -   Cash proceeds received (excluding bridge loan proceeds);     -   Proceeds receivable; and     -   Remaining fair value.

Having received an IRR Report indication, in step 910, reporting routine 900 may determine that each line requires one or more reporting components. For example, the “Cash investments” line may require four reporting components, comprising accounts having the following transaction types: Equity investments (e.g., transaction type identifier 1310); Debt Investments (e.g. transaction type identifier 1210); Outside basis (e.g. transaction type identifier 1318); and Bridge loan proceeds (e.g. transaction type identifier 127X).

Continuing with the same example, the “Remaining fair value” line may require other reporting components, comprising accounts having the following transaction types: Debt Investments (12XX)+Equity Investments (13XX).

Various other reporting lines may similarly require various other predetermined reporting components. Once all required reporting components have been determined in block 910, reporting routine 900 iterates over all reporting components from beginning block 915 to ending block 935. In block 800, the account identification subroutine 800, illustrated in FIG. 8 and discussed above, is run to identify the account associated with the indicated transaction parameters and the current reporting component. In block 920, reporting routine 900 obtains all accounting entries from the identified account. In block 925, reporting routine 900 optionally processes the accounting entries obtained in block 920. For example, if required by the indicated report, the accounting entries may be sub-totaled by date. Similarly, if required by the indicated report, in block 930, supplemental information associated with one or more of the transaction parameters currently being processed. For example, reporting routine 900 may obtain a legal name of an investment entity or target, or a descriptive name of a security. The reporting component processing loop ends at block 935, and if there are other reporting components to process, reporting routine iterates back to block 915 to process the next reporting component.

Once all reporting components have been processed, reporting routine 900 proceeds to block 940, where the various accounting entries obtained and/or processed in iterative blocks 920 and/or 925 are further processed. For example, to generate a Cash investments line for an IRR Report, a sum of accounting entries from the Bridge loan proceeds component may be subtracted from a sum of accounting entries from the Equity investments component, from the Debt Investments component, and from the Outside basis component.

In block 945, the obtained and processed components are combined with supplemental information obtained (if any), and the report formatted for display on an output device, such as a display, monitor, printer, or electronic storage device. Reporting routine ends at block 999.

Exemplary Reports

FIG. 10 is an exemplary Partner Capital Account Summary report 1000 in accordance with one embodiment. Data is shown reported on a quarterly 1005A-D, annual 1010, and FTD 1015 basis. In various embodiments, a Partner Capital Account Summary report may be run for any 12 month period for a single investment entity or a “family” of investment entities.

FIG. 11 is an exemplary Portfolio Summary report 1100 in accordance with one embodiment. In various embodiments, a Portfolio Summary report 1100 may include additional information such as current ownership, lead partner, geographic region, and/or public/private status. In some embodiments, a Portfolio Summary report 1100 can be designed to run for subsets of the portfolio (such as lead partner).

FIG. 12 is an exemplary Returns Analysis report 1200 in accordance with one embodiment. The illustrated report 1200 shows a gross Internal Rate of Return (“IRR”) for the investment entity, as well as a Net IRR 1210 for only limited partner investor entities, and a Net IRR 1215 for all investor entities.

FIG. 13 is an exemplary Gross IRR Analysis report 1300 in accordance with one embodiment. In some embodiments, IRR by investment target may also be presented. In various embodiments, a Gross IRR Analysis report 1300 may be run for subsets of an investment portfolio, such as by partner, sector, or region.

FIG. 14 is an exemplary Transaction Detail report 1400 in accordance with one embodiment. In some embodiments, a Transaction Detail report 1400 may be generated for various subsets, including for a single deal, for a single investment target, for a subset of the fund's investment portfolio such as a single investment entity, for all investment targets, for a specific time period, and/or fund-to-date.

FIG. 15 is an exemplary Schedule of Portfolio Investments report 1500 in accordance with one embodiment. In various embodiments, a Schedule of Portfolio Investments report 1500 may be run at the fund or investment entity level.

FIG. 16 is an exemplary Portfolio Investments for Specified Period report 1600 in accordance with one embodiment. In various embodiments, a Portfolio Investments for Specified Period report 1600 may be generated for any user-defined period over the entire life of the fund.

FIG. 17 is an exemplary Realizations report 1700 in accordance with one embodiment.

FIG. 18 is an exemplary Statement of Assets, Liabilities, and Partners' Capital report 1800 in accordance with one embodiment.

FIG. 19 is an exemplary Statement of Operations report 1900 in accordance with one embodiment.

FIG. 20 is an exemplary Statement of Cash Flows report 2000 in accordance with one embodiment.

FIG. 21 is an exemplary Partners Capital Account Activity report 2100 in accordance with one embodiment.

FIG. 22 is an exemplary Condensed Schedule of Portfolio Investments report 2200 in accordance with one embodiment.

FIG. 23 is an exemplary Treasury Status report 2300 in accordance with one embodiment.

FIG. 24 is an exemplary Deal Summary report 2400, in accordance with one embodiment, showing fund totals with details by various investment entities 2505A-C. In various embodiments, a Deal Summary report 2400 may also be generated for a user-defined period.

FIG. 25 is an exemplary Funding Detail report 2500 in accordance with one embodiment Like Transaction Detail report 1400, in various embodiments, a Funding Detail report 2500 may be generated for a subset of the investment portfolio or a user-defined period.

FIG. 26 is an exemplary Statement of Changes in Partners' Capital report 2600 in accordance with one embodiment.

FIG. 27 is an exemplary Statement of Operations Detail report 2700 in accordance with one embodiment. In various embodiments, a Statement of Operations Detail report 2700 may be generated on a quarterly, fiscal year, or fund-to-date basis.

FIG. 28 is an exemplary “Dashboard” report 2800, which summarizes desired information in accordance with one embodiment.

Appendices

An exemplary listing of report definitions is included as Appendix A. Appendix B provides a set of illustrative accounting entries using Gain/Loss account identifier combinations. Appendix C provides a set of illustrative accounting entries using Entity (i.e., Partner) Capital account identifier combinations.

Although specific embodiments have been illustrated and described herein, it will be appreciated by those of ordinary skill in the art that a whole variety of alternate and/or equivalent implementations may be substituted for the specific embodiments shown and described without departing from the scope of the present invention. This application is intended to cover any adaptations or variations of the embodiments discussed herein.

APPENDIX A © 2006, Jayne Thompson

VC View Report Descriptions

Portfolio Analysis

-   -   Gross IRR—Details of calculation of portfolio-level (“gross”)         IRR. Includes IRR calculations by individual investment and the         ability to expand cash flow detail by investment. May be run         using either an actual date or mid-month convention for         cashflows.     -   Net IRR—All Partners—Details of calculation of Net IRR to all         Partners (including the GP). Includes the ability to expand         contributions and distributions details by date. May be run         using either an actual date or mid-month convention for         cashflows. The results will not be valid for periods after the         most recent quarterly closing.     -   Net IRR—Limited Partners Only—Details of calculation of Net IRR         to Limited Partners only. Includes the ability to expand         contributions and distributions details by date. May be run         using either an actual date or mid-month convention for         cashflows. The results will not be valid for periods after the         most recent quarterly closing.     -   Weekly Dashboard—Snapshot of portfolio, including commitments,         investments and reserves by sector; recent portfolio         transactions; commitment and investment information on five         largest fund commitments; and cash/LOC availability.     -   Fund Total Value Rollforward—Displays by portfolio company the         total value at beginning of quarter, amounts invested during the         quarter, the net increase (decrease) from operating activities,         and total value at the end of the quarter.     -   Fund Fair Value Rollforward—Displays by portfolio company the         unrealized value at the beginning of quarter, the categories of         transactions affecting remaining fair value (e.g., investment         purchases or realizations, unrealized adjustments, and other         income related adjustments), and unrealized value at the end of         the quarter.     -   Lead Ptr IRR—Details of calculation of portfolio-level (“gross”)         IRR for selected “lead” partner. Includes the ability to expand         cash flow detail by investment. Also includes summary of amounts         invested by sector and year.     -   Ptr IRR—Details of calculation of portfolio-level (“gross”) IRR         for selected “assigned” partner. Includes the ability to expand         cash flow detail by investment. Also includes summary of amounts         invested by sector and year.     -   (Sector) IRR—Details of calculation of portfolio-level (“gross”)         IRR for selected sector. Includes the ability to expand cash         flow detail by investment. Also includes summary of amounts         invested by year.     -   IRR by Sector—Details of calculation of portfolio metrics by         sector, including IRR.     -   IRR by Partner—Details of calculation of portfolio metrics by         lead partner, including IRR.

Financial Statements and Supporting Schedules

Allocations Worksheets

-   -   Allocations Worksheet—Provides the data for the quarterly         allocations calculations and upload to Dynamics GL.     -   8/20% Pref Return—Calculates the 8 or 20 percent (as applicable)         preferred return as required for quarter allocations.

Fund Entity Financial Statements Report Package**

-   -   Balance Sheet—Statement of Assets, Liabilities and Partners'         Capital.     -   Statement of Operations—Statement of Operations—Quarter and YTD.     -   Statement of Partner Capital—Statement of Changes in Net         Assets—Quarter and YTD.     -   Statement of Cash Flows—Statement of Cash Flows—Quarter and YTD.     -   Portfolio Investments—Schedule of Portfolio Investments.     -   Capital Accounts—Individual Capital Accounts—Quarter, YTD and         FTD.

Supplemental Financial Reports

-   -   Fund Capital Summary—Side-by-side Statement of Changes in         Partners' Capital for fund entities.     -   Condensed Port Sch—Summaries by a) Category, b) Sector, and c)         Security Type for selected fund entity for inclusion in audited         statements.     -   Operations Detail QTR—Summarizes Investment Income, Unrealized         Adjustments, and Realized Gain/Loss by portfolio company for         user selected three month period.     -   Operations Detail YTD—Summarizes Investment Income, Unrealized         Adjustments, and Realized Gain/Loss by portfolio company through         user selected month end for the current fiscal year.

Portfolio Monitoring

Activity by Associate—Detail of transactions (dollars and shares) by Portfolio Company for user-selected Columbia Associate and thru user-selected date. Includes capitalized interest but does not include blocker fundings.

-   -   Certificate Inventory—Detail of stock certificates expected (per         the closing documents) and received as certificated shares. Use         as a tickler report to identify certificates for follow-up.     -   Deal Funding Activity—Detail of transactions (dollars and         shares) by user-selected “deal” thru user-selected date.         Includes capitalized interest but does not include blocker         fundings. See Deal Trans Detail report for all activity. A         “deal” may include multiple portfolio companies.     -   Deal Trans Detail—Detail of all transactional activity for a         “deal”, including amounts funded to related companies, blocker         fundings, capitalized interest, OID amortization, basis         returned, and basis written off. Does not include shares (see         Deal Funding Activity report). A “deal” may include multiple         portfolio companies.     -   Fund Portfolio—Consolidated schedule of Portfolio Investments         for Columbia IV as of user-selected date.     -   FY Investment by Quarter—Details of amounts invested (funded         only) by entity subtotaled by quarter for the current fiscal         year.     -   Investment by Quarter—Details of amounts invested (funded only)         by entity for user-defined three month period.     -   Investment by Sector—Amount invested (funded only) by company by         sector and category (Technology v. Services) through         user-selected period.     -   Period Invested—Details of amounts invested (funded only) by         portfolio company and security for user-defined period. Includes         monthly subtotals.     -   Period Invested by Co—Details of amounts invested (funded only)         subtotaled by portfolio company for user-defined period.     -   Period Realized—Details proceeds received, proceeds receivable,         cost relieved and realized gain or loss by portfolio company for         user-defined reporting period.     -   Portfolio Co Trans Detail—Detail of remaining basis for         user-selected portfolio company, including amounts funded to         company, blocker fundings, capitalized interest, OID         amortization, basis returned, and basis written off. Does not         include shares (see Portfolio Company Detail report).     -   Portfolio by Category—Summary of amount invested (funded only)         by each fund entity in each portfolio company grouped by         category (services v. technology) through user-selected period.     -   Portfolio by Transaction—Amount invested (funded only) by         security by transaction date through user-selected period end.         Includes original investment amounts only; does not include         exchanges.     -   Portfolio Company Detail—Detail of transactions (dollars and         shares) for a user-selected single portfolio company grouped by         security. Includes funded amounts only excluding blocker         fundings. Does not include other items affecting basis such as         capitalized interest. See Portfolio Co Trans Detail report for         all activity affecting basis.     -   Valuation JE—Worksheet for calculation of valuation adjustments         by security and fund entity. Includes journal entry for upload.

Commitments Reports (if applicable)

-   -   Entity Commitments—Detail of amounts funded and committed by         portfolio company for selected fund entity. Used for footnote         disclosure in annual audited statements.     -   Fund Commitments—Detail of amounts funded, committed and         reserved by sector and portfolio company.

Investment Transactions Report Package**

-   -   Portfolio Summary—Summary of amount invested (i.e., funded only)         by portfolio company by fund entity. Includes both direct and         indirect investments. Does not include blocker fundings.     -   Portfolio Investments at Cost—Detail of securities purchased by         fund entity (including capitalization investment income).         Includes both direct and indirect investments. Includes original         investments purchases only; does not reflect exchanges.     -   Trans Detail—Detail of all transactions affecting remaining         basis for all companies in the portfolio. Includes both direct         and indirect investments by fund entity. A summary by type of         transactional activity (i.e., funded amounts, capitalized         interest, OID amortization, basis recovered, and basis written         off) appears at the end of the report. Does not include shares;         see Fund Detail report for this information.     -   FTD Realizations—Detail of proceeds realized, proceeds         receivable, basis relieved, and realized gain/loss by portfolio         company by transaction date.     -   Fund Detail—Detail of transactions (dollars and shares) for all         companies in the portfolio. Includes both direct and indirect         investments by fund entity. Includes funded cost and capitalized         interest and reflects exchanges but does not include other basis         adjustments. See Trans Detail for complete basis information.     -   Direct Detail—Detail of transactions (dollars and shares) for         all companies in the portfolio by direct investing entity.         Includes funded cost and capitalized interest and reflects         exchanges but does not include other basis adjustments.     -   Employee Investment Entity Summary—Detail of amounts funded by         portfolio company and security for each employee investor. Grand         total ties to employee investment entity total on Portfolio         Summary report.     -   Blocker Funding—Detail of blocker fundings by blocker         corporation (with notation of security to which the blocker         funding is appended for financial reporting purposes).

Partners' Capital

Capital Account Reports

-   -   Capital AC—Individual—Individual capital account for         user-selected partner and twelve month reporting period (must         end on quarter).     -   Capital Call AR—Unpaid capital calls by entity.

Capital Call Worksheets

-   -   GP Cont by Entity by Date—Summarizes total contributions         (including cashless contributions but excluding the adjustment         for no self-charged management fee) by the General Partner by         entity by transaction date. Use this report to calculate the         amount to call from the General Partner entity.     -   Management Fees—Calculates quarterly management fees, net of         deemed contribution offsets.     -   Capital Call—Calculates individual capital call amounts for fund         partnership (and the offshore feeder entity). User inputs are i)         Investment amount, ii) number of days in quarter for management         fee calculation, iii) Expense amount, iv) offshore feeder         expense amount, v) call date and vi) due date.

Entity Level Partners' Capital Reports

-   -   Capital AC—Entity—Entity-level capital account for user-selected         entity and 12-month reporting period (must end on quarter).     -   Capital AC—Fund—Fund-level capital account for user-selected         12-month reporting period (must end on quarter).     -   Cash Contributions by Entity by Date—Total cash contributions by         entity by transaction date. Does not include interest equivalent         contributions.     -   Contributions by Entity by Date—“Contributions” as defined in         limited partnership agreement by entity by transaction date.         Includes cashless GP contribution and GP management fee         contribution. Does not include interest equivalent         contributions.     -   Distributions by Entity by Date—Distributions by entity by         transaction date.

Partners' Capital Report Package**

-   -   Entity Summary—Summary of capital account activity by entity,         including offsets for no self-charged management fee and         cashless contributions by the GP.     -   Partner Capital Summary—Detail by partner of subscriptions,         remaining subscriptions, and FTD contributions and         distributions.     -   Subs by Closing—Detail of Subscriptions by closing date.     -   Contributions Detail—Detail of “Contributions” (as defined in         limited partnership agreement) by partner and due date for each         entity.     -   Cash Contributions Detail—Detail of cash contributions by         partner and due date for each entity. Does not include interest         equivalent contributions.     -   Interest Equivalent Contributions—Detail of interest equivalent         contributions for LPs admitted after initial fund closing.     -   GP Deemed Detail—Detail of GP's deemed (“cashless”) contribution         by call date.

Treasury Reports

-   -   Debt Cov—Calculates financial ratio covenants for credit         agreement.     -   Treasury Status—Daily treasury status report including cash,         LOC, receivables and payables balances.

** “Report packages” are generated as multiple spreadsheets in a single workbook. Any report definition may be grouped with any other report definition(s) to create a report package. The report packages designated above are recommended as a minimum.

APPENDIX B © 2006, Jayne Thompson

Example Accounting Entries

Main Entity ID Type Segment Segment Segment Segment DR CR Example assumptions: 1. Two fund investing entities: Qualified Purchaser Entity (90% of commitments) A01 Offshore Entity (10% of commitments) A02 E20F 2. Portfolio company ABC, LLC For direct investments CABC For indirect investments IABC 3. Blocker corporation for offshore fund I01 4. Securities acquired Series A preferred stock C0A0 Convertible notes A001 5. Securities received in exchance Common stock G000 Sample entries: A. Acquire 100,000 shares of Series A preferred stock for $1M (i.e., $10 per share) Invested - equity (by QP Entity) 1310 A01 CABC C0A0 900,000 Invested - equity (by Offshore Entity) 1310 A02 IABC C0A0 100,000 Invested - equity (by Blocker Corp) 1310 I01 CABC C0A0 100,000 Cash (QP Entity) 1000 A01 0000 0000 900,000 Cash (Offshore Entity) 1000 A02 0000 0000 100,000 Contributed Capital in Blocker Corp 3191 I01 E20F 0000 100,000 Shares expected (by QP Entity) 1510 A01 CABC C0A0 90,000 Shares expected (by Offshore Entity) 1510 A02 IABC C0A0 10,000 Shares expected (by Blocker Corp) 1510 I01 CABC C0A0 10,000 ** Since Shares expected (and shares received below) are unit (rather than posting) accounts, these entries are one-sided. B. Receive stock certificates for above transaction Shares received (by QP Entity) 1520 A01 CABC C0A0 90,000 Shares received (by Offshore Entity) 1520 A02 IABC C0A0 10,000 Shares received (by Blocker Corp) 1520 I01 CABC C0A0 10,000 C. Acquire $500,000 of 10% convertible notes Invested - debt (by QP Entity) 1210 A01 CABC A001 450,000 Invested - debt (by Offshore Entity) 1210 A02 IABC A001 50,000 Invested - debt (by Blocker Corp) 1210 I01 CABC A001 50,000 Cash (QP Entity) 1000 A01 0000 0000 450,000 Cash (Offshore Entity) 1000 A02 0000 0000 50,000 Contributed Capital (Blocker Corp) 3191 I01 E20F 0000 50,000 D. Record first year of interest on notes Accrued interest receivable (QP Entity) 1710 A01 CABC A001 45,000 Accrued interest receivable (Blocker Corp) 1710 I01 CABC A001 5,000 Portfolio interest income (QP Entity) 4112 A01 CABC A001 45,000 Portfolio interest income (Blocker Corp) 4112 I01 CABC A001 5,000 E. Convert Series A preferred and convertible notes (including principal and interest) to 10,000 shares of common stock Exchange preferred for common (QP Entity) 1352 A01 CABC G000 900,000 Exchange preferred for common (Offshore Entity) 1352 A02 IABC G000 100,000 Exchange preferred for common (Blocker Corp) 1352 I01 CABC G000 100,000 Exchange preferred for common (QP Entity) 1352 A01 CABC C0A0 900,000 Exchange preferred for common (Offshore Entity) 1352 A02 IABC C0A0 100,000 Exchange preferred for common (Blocker Corp) 1352 I01 CABC C0A0 100,000 Converted from debt principal (QP Entity) 1320 A01 CABC G000 450,000 Converted from debt principal (Offshore Entity) 1320 A02 IABC G000 50,000 Converted from debt principal (Blocker Corp) 1320 I01 CABC G000 50,000 Conv debt converted to equity (QP Entity) 1261 A01 CABC A001 450,000 Conv debt converted to equity (Offshore Entity) 1261 A02 IABC A001 50,000 Conv debt converted to equity (Blocker Corp) 1261 I01 CABC A001 50,000 Converted from debt interest (QP Entity) 1325 A01 CABC G000 45,000 Converted from debt interest (Offshore Entity) 1325 A02 IABC G000 5,000 Converted from debt interest (Blocker Corp) 1325 I01 CABC G000 5,000 Accrued interest receivable 1710 A01 CABC A001 45,000 Contra - Blocker interest capitalized 1329 A02 IABC A001 5,000 Accrued interest receivable 1710 I01 CABC A001 5,000 Shares expected (by QP Entity) 1510 A01 CABC C0A0 90,000 Shares expected (by Offshore Entity) 1510 A02 IABC C0A0 10,000 Shares expected (by Blocker Corp) 1510 I01 CABC C0A0 10,000 Shares expected (by QP Entity) 1510 A01 CABC G000 9,000 Shares expected (by Offshore Entity) 1510 A02 IABC G000 1,000 Shares expected (by Blocker Corp) 1510 I01 CABC G000 1,000 F. Return Series A preferred stock certificates Shares received (by QP Entity) 1520 A01 CABC C0A0 90,000 Shares received (by Offshore Entity) 1520 A02 IABC C0A0 10,000 Shares received (by Blocker Corp) 1520 I01 CABC C0A0 10,000 G. Receive common stock certificates Shares received (by QP Entity) 1520 A01 CABC G000 9,000 Shares received (by Offshore Entity) 1520 A02 IABC G000 1,000 Shares received (by Blocker Corp) 1520 I01 CABC G000 1,000 H. Fund $10,000 of blocker expenses Invested - Blocker expenses 1319 A02 IABC G000 10,000 Cash (of Offshore Entity) 1000 A02 0000 0000 10,000 Cash (of Blocker Corp) 1000 I01 0000 0000 10,000 Contributed Capital (Blocker Corp) 3191 I01 E20F 0000 10,000 I. Sell common shares for $3M including 10% escrow (presume that Offshore Entity sells blocker shares in transaction) Cash (QP Entity) 1000 A01 0000 0000 2,430,000 Cash (Offshore Entity) 1000 A02 0000 0000 270,000 AR - Securities sold (QP Entity) 1720 A01 CABC G000 270,000 AR - Securities sold (Offshore Entity) 1720 A02 IABC G000 30,000 Sale of equity (QP Entity) 1372 A01 CABC G000 1,395,000 Sale of equity (Offshore Entity) 1372 A02 IABC G000 160,000 Cash realized gain (QP Entity) 4521 A01 CABC G000 1,305,000 Cash realized gain (Offshore Entity) 4521 A02 IABC G000 140,000 (You would also relieve shares expected and received on the sale date by reversing the related entries.) J. Collect 75% of the escrow and write-off balance Cash (QP Entity) 1000 A01 0000 0000 202,500 Cash (Offshore Entity) 1000 A02 0000 0000 22,500 Cash realized gain (QP Entity) 4521 A01 CABC G000 67,500 Cash realized gain (Offshore Entity) 4521 A02 IABC G000 7,500 AR - Securities sold (QP Entity) 1720 A01 CABC G000 270,000 AR - Securities sold (Offshore Entity) 1720 A02 IABC G000 30,000

APPENDIX C © 2006, Jayne Thompson

Example Accounting Entries

Capital Main Entity ID Type Commitment Segment Segment Segment Segment DR CR Example Assumptions for Main Fund Partnership (Entity A01) ABC Limited Partner 95,000 P002 General Partner 5,000 PG01 Total 100,000 Other assumptions: 2% management fee 20% of GP contributions done on a cashless basis Sample entries: A. Record initial commitments Initial commitment - ABC 3001 A01 P002 0000 95,000 Initial commitment - GP 3001 A01 PG01 0000 5,000 Remaining commitment - ABC 3002 A01 P002 0000 95,000 Remaining commitment - GP 3002 A01 PG01 0000 5,000 B. Call $20,000 for investments plus management fee (assume you call a full year of fees to simplify example calculations) Capital call receivable - ABC 1100 A01 P002 0000 20,900 Capital call receivable - GP 1100 A01 PG01 0000 800 Contributions - No self chg mgmt fee offset 3100 A01 PG01 00ZZ 100 Contributions - Deemed offset 3100 A01 PG01 00ZY 200 Contributions - ABC 3100 A01 P002 00CC 20,900 Contributions - GP 3100 A01 PG01 00CC 1,100 The JE date should be the DUE date of the call. We typically include the call date in the description. Remaining commitment - ABC 3002 A01 P002 0000 20,900 Remaining commitment - GP 3002 A01 PG01 0000 1,100 Commitment fulfilled - ABC 3003 A01 P002 0000 20,900 Commitment fulfilled - GP 3003 A01 PG01 0000 1,100 C. Collect capital call Cash 1000 A01 0000 0000 20,900 Capital call receivable - ABC 1100 A01 P002 0000 20,900 Cash 1000 A01 0000 0000 800 Capital call receivable - GP 1100 A01 PG01 0000 800 D. Pay management fees, net of deemed offset Management fees 7100 A01 0000 0000 1,900 Management fees - Deemed offset 7100 A01 0000 00OC 200 Cash 1000 A01 0000 0000 1,700 

1. A computer-implemented accounting method for an investment partnership entity having a plurality of partners, the accounting method comprising: obtaining, via an electronic data input interface, a partnership allocation transaction indication comprising an investment entity, one of the plurality of partners, and a transaction type; selecting one of at least three transaction type identifiers from a first electronic data source in accordance with said obtained transaction type; selecting one of a plurality of unique investment entity identifiers from a second electronic data source in accordance with said obtained investment entity; selecting one of a plurality of partner identifiers from a third electronic data source in accordance with said obtained one of the plurality of partners; creating, by a processor of the computer, a particular general ledger account uniquely associated with a particular combination of identifiers comprising said selected one of said investment entity identifiers, said selected one of said at least three transaction type identifiers, and said selected one of said plurality of partner identifiers.
 2. The method of claim 1, wherein said partnership allocation transaction indication further comprises a partner transaction type, the method further comprising: selecting one of a plurality of unique partner transaction identifiers from a fourth electronic data source in accordance with said obtained partner transaction type.
 3. The method of claim 1, wherein said at least three unique transaction type identifiers comprise a subset comprising a plurality of identifiers distinguishably associated with a plurality of partners' capital allocations transaction types
 4. The method of claim 3, wherein said plurality of partners' capital allocations transaction types comprises Net investment income/loss; Realized gains/losses; and Unrealized appreciation/depreciation.
 5. The method of claim 1, wherein said first through fourth electronic data sources comprise a single electronic data source.
 6. A tangible computer-readable medium containing instructions that when executed by a processor, perform the method of claim
 1. 7. An apparatus comprising a processor and a memory containing instructions that when executed by the processor, perform the method of claim
 1. 8. A computer-implemented method of reporting an investment sum for a selected investment entity, the method comprising: selecting, by the computer from among a multiplicity of accounts in the general ledger, a plurality of accounts comprising: a uniquely identifiable cash equity investment account substantially exclusively comprising a plurality of cash equity accounting entries associated with the selected investment entity and a particular equity security of a selected target; a uniquely identifiable second equity investment account substantially exclusively comprising a plurality of outside basis accounting entries associated with cash expenses, other than paid in capital of said selected target, incurred by the selected investment entity to acquire said particular equity security; a uniquely identifiable third equity investment account substantially exclusively comprising a plurality equity basis return accounting entries associated with cash return of basis to the selected investment entity from said particular equity security; a uniquely identifiable realized gain account substantially exclusively comprising a plurality realized gain accounting entries associated with cash gains of the selected investment entity from said particular equity security; and a uniquely identifiable proceeds receivable account substantially exclusively comprising a plurality proceeds receivable accounting entries associated with proceeds receivable by the selected investment entity from said equity security; calculating, by the computer, a plurality of net cash flow sums comprising; a cash equity sum comprising said plurality of cash equity accounting entries; an outside basis sum comprising said outside basis accounting entries; a equity basis return sum comprising said equity basis return accounting entries; a cash realized gain sum comprising said realized gain accounting entries; and a receivable for securities sold sum comprising said proceeds receivable accounting entries; calculating, by the computer, an investment sum comprising said equity basis return sum plus said cash realized gain sum less said cash equity sum, said outside basis sum, and said receivable for securities sold sum; and outputting to a display device said calculated investment sum.
 9. The method of claim 8, further comprising subtotaling at least one of said plurality of net cash flow sums by transaction date.
 10. The method of claim 9, wherein said investment sum comprises a rate of return.
 11. The method of claim 8, wherein: said first equity investment account is uniquely identified by a plurality of account segments comprising a first selected transaction type segment unique to cash invested for equity, a selected entity segment unique to the selected investment entity, a selected investment target segment unique to the selected target, and a first security type segment unique to a type of said particular equity security; said second equity investment account is uniquely identified by a plurality of account segments comprising a second selected transaction type segment unique to cash expenses, other than paid in capital, incurred to purchase an equity security, said selected investment entity segment, said selected investment target segment, and said first security type segment; said third equity investment account is uniquely identified by a plurality of account segments comprising a third selected transaction type segment unique to cash return of equity investment basis, said selected investment entity segment, said selected investment target segment, and said first security type segment; said first cash realized gain account is uniquely identified by a plurality of account segments comprising a fourth selected transaction type segment unique to cash realized gains, said selected investment entity segment, said selected investment target segment, and said first security type segment; and said first receivable for securities sold account is uniquely identified by a plurality of account segments comprising a fifth selected transaction type segment unique to proceeds from securities sold, said selected investment entity segment, said selected investment target segment, and said first security type segment.
 12. A tangible computer-readable medium containing instructions that when executed by a processor, perform the method of claim
 8. 13. An apparatus comprising a processor and a memory containing instructions that when executed by the processor, perform the method of claim
 8. 14. A computer-implemented method of creating investment reports, the method comprising: generating, by a segmentation processor, a plurality of account identifiers specific to an investment in an investment asset by an investment entity, wherein each account identifier comprises a plurality of identification segments, including at least a transaction type identification segment, an investment entity identification segment, an investment target identification segment, and a security type identification segment; creating, by an account-creation processor, a plurality of accounts in an electronic general ledger data repository, in accordance with said plurality of account identifiers; obtaining from said plurality of accounts, by a data-acquisition processor, account data related to said investment; automatically generating, by a reporting processor without manual data manipulation, an external investment report in accordance with said account data and said account identifiers; and automatically generating, by said reporting processor without manual data manipulation, an internal investment report in accordance with said account data and said account identifiers.
 15. A tangible computer-readable medium containing instructions that when executed by a processor, perform the method of claim
 14. 16. An apparatus comprising a processor and a memory containing instructions that when executed by the processor, perform the method of claim
 14. 